MediaZest Plc
("MediaZest"or the "Company”; AIM:
MDZ)
Final Results Year
Ended 31 March 2017
MediaZest, the creative audio-visual company, is pleased to
provide shareholders with final results for the year ended
31 March 2017.
CHAIRMAN’S
STATEMENT
Introduction
The results for MediaZest plc (the “Group”) for the year ended
31 March 2017 incorporate the results
of its subsidiary, MediaZest International Limited, which is wholly
owned.
Results for the year
- Revenue for the period was £3,013,000 down 4% (2016:
£3,144,000).
- Gross profit was £1,313,000 - 1% change (2016:
£1,331,000).
- Gross margins improved to 44% (2016: 42%).
- EBITDA was a loss of £2,000 (2016: loss of £81,000).
- Loss after tax of £142,000 fell 43% (2016: loss of
£248,000).
- The basic and fully diluted loss per share was 0.01 pence (2016: 0.02
pence).
- Cash in hand at period end £160,000 (2016: £9,000).
Business overview
The Group continued to make progress during the year, delivering
a full year unadjusted EBITDA loss of £2,000 (2016: loss of
£81,000). Loss after tax reduced to £142,000 (2016: loss of
£248,000) after depreciation and amortisation plus interest -
predominantly on shareholder loans.
The operational business, MediaZest International Limited, made
a profit after tax of £118,000 (2016: £60,000) again showing
improvement year on year. In addition there was a reduction in
overhead cost attributable to MediaZest plc of £50,000.
This improvement in financial results was achieved through
strategic focus on permanent installation work, with accompanying
growth in recurring revenues, and continued tight cost control over
Administrative Expenses. This policy continues to be applied and is
delivering further progress in the current year. Finance costs fell
to £67,000 (2016: £87,000) largely as a result of reclassification
of fees included within this category compared to the prior
year.
Turnover for the year decreased by £131,000 or 4.2% year on year
partly due to timing on two large projects which were completed
shortly after the year end. However, gross margin increased to 44%
(2016: 42%) and as a result, gross profit was almost identical to
the prior year. This increase in margin is largely a function of
the increase in recurring revenues.
Project highlights for the year included:
-
third Rockar deployment, at Westfield Stratford, on this
occasion with Jaguar Land Rover
-
a substantial retail innovation project for Clydesdale Bank at
their new “Studio B” location (completed in April 2017)
-
ongoing work with fashion brands Ted Baker and Diesel
-
initial phases of a major retail store for VW at Birmingham
Bullring (completed in July 2017)
-
substantial ongoing works with Hyundai in UK showrooms
-
a growing number of permanent overseas deployments for clients
such as Farrow & Ball, Ugg (part of Deckers Brands) and
Ted Baker
The combined effect of improved margins and reduced
administrative expenses resulted in a substantial reduction in loss
after tax to £142,000 (2016: £248,000).
STRATEGY
The Board continues to have the following policy to maximise
revenues and long term value in the company:
- Emphasis on maximising opportunities by concentrating the
Group’s marketing and sales efforts on acquiring and developing
business relationships with large scale customers which have both
the desire and potential of rolling out digital signage in multiple
locations;
- Improve the Group’s recurring revenue streams through different
managed service offerings;
- Maintain the emphasis on proprietary products such as MediaZest
Retail Analytics which can generate intellectual property on the
statement of financial position and provide ongoing sustainable
revenue streams; and
- Market the Group’s ‘one stop shop’ positioning to a wide range
of global retailers in conjunction with existing partners and
continue to grow the number of overseas deployments.
This strategy has resulted in progress over the last 12 months.
In particular, the growth in recurring revenues has been
encouraging and the Group now provides ongoing managed services for
approximately 2,000 screens around the world. Deployments as far
away as Australasia, North America
and Asia Pacific have been added
during the last 12 months, and the Board believes this represents a
sizeable opportunity for future growth as more UK and European
based brands look to us our services to maintain consistency in
their stores worldwide.
Consistent with the prior year, the Group continues to see
growth in the development of touchscreen driven customer
experiences allowing the consumer to browse, learn about and
interact with our clients’ products. MediaZest is able to design,
program, deploy, support and update content on these systems using
our in-house team and this proposition continues to be well
received by clients.
FUNDRAISING DURING THE PERIOD
On 11 May 2016, Board moved to add
to working capital funds with a successful placing of 166,666,800
shares at 0.15p per share to raise £250,000 before expenses.
The shares were admitted to trading on AIM in June 2016.
In addition, £50,000 of the outstanding interest due on
shareholder loans was also converted to 33,333,333 shares at the
same price.
In the prior year the Group issued share options to employees in
order to align further with shareholder interests and provide
additional incentives over Group performance whilst maintaining
close control over wages. No further options were issued in the
financial year ended 31 March
2017.
BOARD APPOINTMENTS AND
RESIGNATIONS
Andy Last resigned from the Board
on 31 July 2016 and left the Group on
5 August 2016.
The Group has subsequently promoted a new Group Financial
Controller internally to lead the finance team.
Outlook
The Group continues to make progress, whilst the Board recognise
further work needs to be done to realise the Company’s full
potential.
The increase in recurring revenue contracts has provided a solid
base for the new financial year. It has continued to grow in the
current period.
The new year has begun well with the successful completion of
the Clydesdale Bank and VW projects, plus the acquisition of
several new clients with substantial projects in the coming
months.
Lance O’Neill
Chairman
Date: 30
August 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
|
Note |
2017 |
2016 |
|
|
£'000 |
£'000 |
Continuing
operations |
|
|
|
Revenue |
|
3,013 |
3,144 |
|
|
|
|
Cost of sales |
|
(1,700) |
(1,813) |
|
|
|
|
Gross
profit |
|
1,313 |
1,331 |
|
|
|
|
Administrative
expenses |
|
(1,315) |
(1,412) |
|
|
|
|
EBITDA |
|
(2) |
(81) |
|
|
|
|
Administrative
expenses – depreciation & amortisation |
|
(77) |
(79) |
|
|
|
|
Operating
loss |
2 |
(79) |
(160) |
|
|
|
|
Finance costs |
|
(67) |
(87) |
|
|
|
|
Loss on ordinary
activities before taxation |
|
(146) |
(247) |
|
|
|
|
Tax on loss on
ordinary activities |
|
4 |
(1) |
|
|
|
|
Loss for the year
and total comprehensive loss for the year attributable to the
owners of the parent |
|
(142) |
(248) |
|
|
|
|
Loss per ordinary
0.1p share |
|
|
|
Basic |
|
(0.01p) |
(0.02p) |
Diluted |
|
(0.01p) |
(0.02p) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 MARCH
2017
|
|
2017 |
2016 |
|
|
£'000 |
£'000 |
Non-current
assets |
|
|
|
Goodwill |
|
2,772 |
2,772 |
Tangible fixed
assets |
|
51 |
78 |
Intangible fixed
assets |
|
14 |
39 |
Total non-current
assets |
|
2,837 |
2,889 |
|
|
|
|
Current
assets |
|
|
|
Inventories |
|
69 |
68 |
Trade and other
receivables |
|
243 |
353 |
Cash and cash
equivalents |
|
160 |
9 |
Total current
assets |
|
472 |
430 |
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
|
(860) |
(944) |
Financial
liabilities |
|
(424) |
(452) |
Total current
liabilities |
|
(1,284) |
(1,396) |
|
|
|
|
Net current
liabilities |
|
(812) |
(966) |
|
|
|
|
Non-current
liabilities |
|
|
|
Financial
liabilities |
|
(18) |
(57) |
Total non-current
liabilities |
|
(18) |
(57) |
|
|
|
|
Net assets |
|
2,007 |
1,866 |
|
|
|
|
Equity |
|
|
|
Share capital |
|
3,499 |
3,299 |
Share premium
account |
|
5,221 |
5,138 |
Share options
reserve |
|
146 |
146 |
Retained earnings |
|
(6,859) |
(6,717) |
Total
equity |
|
2,007 |
1,866 |
The financial statements were approved and authorised for issue
by the Board of Directors on 30 August
2017 and were signed on its behalf by:
Geoffrey Robertson
CEO
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
|
Share |
Share |
Share
Options |
Retained |
Total |
|
Capital |
Premium |
Reserve |
Earnings |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Balance at 1 April
2015 |
3,299 |
5,138 |
7 |
(6,469) |
1,975 |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(248) |
(248) |
Total comprehensive
loss for the year |
- |
- |
- |
(248) |
(248) |
Share based payment
charge |
- |
- |
139 |
- |
139 |
|
|
|
|
|
|
Balance at 31 March
2016 |
3,299 |
5,138 |
146 |
(6,717) |
1,866 |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(142) |
(142) |
|
|
|
|
|
|
Total comprehensive
loss for the year |
- |
- |
- |
(142) |
(142) |
|
|
|
|
|
|
Issue of share
capital |
200 |
100 |
- |
- |
300 |
Share issue costs |
- |
(17) |
- |
- |
(17) |
|
|
|
|
|
|
Balance at 31 March
2017 |
3,499 |
5,221 |
146 |
(6,859) |
2,007 |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2017
|
|
2017 |
2016 |
|
|
£'000 |
£'000 |
|
|
|
|
Net cash used in
operating activities |
|
222 |
(103) |
|
|
|
|
Taxation |
|
9 |
111 |
|
|
|
|
Cash flows used in
investing activities |
|
|
|
Purchase of plant and
machinery |
|
(23) |
(26) |
Disposal of plant and
machinery |
|
11 |
14 |
Purchase of
intellectual property |
|
- |
(14) |
Purchase of leasehold
improvements |
|
(4) |
- |
Net cash used in
investing activities |
|
(16) |
(26) |
|
|
|
|
Cash flow from
financing activities |
|
|
|
Other loans
repayments |
|
(42) |
- |
Other loans |
|
- |
50 |
Shareholder loan
repayments |
|
(66) |
(7) |
Interest paid |
|
(25) |
(87) |
Proceeds of share
issue |
|
250 |
- |
Share issue costs |
|
(17) |
- |
Net cash generated
from / (used in) financing activities |
|
100 |
(44) |
|
|
|
|
Net increase /
(decrease) in cash and cash equivalents |
|
315 |
(62) |
|
|
|
|
Cash and cash
equivalents at beginning of year |
|
(223) |
(161) |
|
|
|
|
Cash and cash
equivalents at end of the year |
3 |
92 |
(223) |
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF
PREPARATION
The financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union, and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006. The financial statements have been prepared
under the historic cost convention unless otherwise stated.
Going concern
The directors have carefully considered the going concern
assumption on the basis of financial projections and the factors
outlined below.
The directors have considered financial projections based upon
known future invoicing, existing contracts, pipeline of new
business and the increasing number of opportunities it is currently
working on, particularly in the retail sector.
In addition, these forecasts have been considered in light of
the ongoing economic difficulties in the global economy and the
result of the recent EU referendum, previous experience of the
markets in which the company operates and the seasonal nature of
those markets, as well as the likely impact of ongoing reductions
to public sector spending. These forecasts indicate that the
company will generate sufficient cash resources to meet its
liabilities as they fall due over the 12 month period from the date
of the approval of the accounts.
The directors have obtained a letter of support from a
shareholder who has provided a loan to the Group totalling £250,000
at 31 March 2017 (2016: £250,000)
stating that they will not call for repayment of the loan within
the 12 months from the date of approval of these financial
statements or, if earlier, until the Group has sufficient funds to
do so.
As a result the directors consider that it is appropriate to
draw up the accounts on a going concern basis. Accordingly,
no adjustments have been made to reflect any write downs or
provisions that would be necessary should the Group prove not to be
a going concern, including further provisions for impairment to
goodwill and investments in Group companies.
2. OPERATING
LOSS
|
2017 |
2016 |
|
£'000 |
£'000 |
This is stated
after charging/(crediting): |
|
|
|
|
|
Depreciation of owned
tangible assets |
23 |
32 |
Amortisation of
intangible assets |
25 |
24 |
Depreciation of assets
held under hire purchase agreements |
29 |
23 |
Pension
contributions |
4 |
5 |
Operating lease
rentals paid: |
|
|
- land and
buildings |
89 |
69 |
- other |
1 |
1 |
3. CASH AND CASH
EQUIVALENTS
|
The Group |
The
Group |
The
Company |
The
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£’000 |
£'000 |
£’000 |
£'000 |
Cash held at bank |
160 |
9 |
- |
- |
Invoice discounting
facility |
(68) |
(232) |
- |
- |
|
92 |
(223) |
- |
- |
NOTE TO THE PRELIMINARY RESULTS
ANNOUNCEMENT OF MEDIAZEST PLC FOR THE YEAR ENDED 31 MARCH 2017
The financial information set out above does not constitute the
Group’s financial statements for the years ended 31 March 2017 or 2016, but is derived from those
financial statements. Statutory financial statements for 2016 have
been delivered to the Registrar of Companies and those for 2017
will be delivered following the Group’s annual general meeting. The
auditors have reported on the 2016 and 2017 financial statements
which carried an unqualified audit report, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006.
Whilst the financial information included in this preliminary
announcement has been computed in accordance with International
Financial Reporting Standards (IFRS), this announcement does not in
itself contain sufficient information to comply with IFRS. The
accounting policies used in preparation of this preliminary
announcement are consistent with those in the full financial
statements that have yet to be published.
AVAILABILITY OF THE REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
The Report and Consolidated Financial Statements for the year
ended 31 March 2017 will be posted to
shareholders on 4 September 2017 and
will also be available to download from the Company's
website: www.mediazest.com
This announcement contains inside information.
Enquiries:
Geoff Robertson
Chief Executive Officer
MediaZest Plc |
0845 207 9378 |
|
|
Edward Hutton / David
Hignell
Nominated Adviser
Northland Capital Partners
Limited |
020 3861 6625 |
|
|
Claire Noyce
Broker
Hybridan LLP |
020 3764 2341 |
Notes to Editors:
About MediaZest
MediaZest is a creative audio-visual systems integrator that
specialises in providing innovative marketing solutions to leading
retailers, brand owners and corporations, but also works in the
public sector in both the NHS and Education markets. The Group
supplies an integrated service from content creation and system
design to installation, technical support, and maintenance.
MediaZest was admitted to the London Stock Exchange's AIM market in
February 2005. For more information,
please visit www.mediazest.com